Good News, Bad News for Xbox 360 in Quarterly Results

According to 1UP, Microsoft had some interesting data for its Xbox 360 and the news is mixed. While Xbox 360 unit sales have hit the 40 million market, hardware and software sales for the console are slowing.

Microsoft has released their latest financial result for the third quarter of their 2010 fiscal year (ending March 31), and along with a ton of different numbers and figures come two large numbers and figures of particular interest: The Xbox 360 has now sold over 40 million units worldwide to date, and the Entertainment and Devices division posted a profit of $165 million.

The bad news: It looks like hardware sales are actually cooling down, as 360 sales in this fiscal quarter were 1.5 million, down 12 percent from 1.7 million units sold in the same quarter last year. But due to the decrease in cost of making Xbox 360s, those 1.5 million unit sales still accounted for $199 million in revenue for the quarter, which saw the overall Entertainment and Devices division (which includes the 360, PC games, and Zune) post revenue of $1.67 billion.

As for software sales, there was a similar small decrease year-over-year: Sales for both the PC and Xbox 360 dropped 5 percent to $240 million. Still, profits for the division year-over-year are up, which Microsoft says is "primarily reflecting an increase in Xbox Live revenue and non-gaming revenue, offset in part by decreased revenue from Xbox 360 video games and decreased Xbox 360 consoles sold."

I still believe that when the conclusion is written for this generation of video game consoles, that the Xbox 360 and PS3 will be neck-and-neck from a unit sales perspective (a huge loss to Microsoft, given its head start and the lackluster beginnings of the PS3 sales cycle). But the success of Xbox Live should overshadow any gains Sony has made, and will prove to be the best reason to own the Microsoft console.

That Microsoft has been unable to drive the success of Xbox Live in other markets (the PC and Zune) is somewhat surprising.